IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON KENNETH EMERSON and KELLY EMERSON, a married couple, Appellants,

v. ISLAND COUNTY, a political subdivision ofthe State ofWashington, Respondent. No. 73208-1-1 DIVISION ONE

UNPUBLISHED OPINION FILED: March 28, 2016 e=3 t/>o rHC: o-> >;-x 3C 3» -H—i ZX3 O-n r\> t> oo ^•nr >~Orr. 3* 3C 3E'> a:'"'1. oo CJ</> jct O—; C/1 3C<



### Becker, J. — Kenneth and Kelly Emerson applied for a permit to build an addition on to their Island County home. Island County issued the permit after 

### lengthy wrangling overwhetherthere was a wetland on the property. The Emersons filed suit seeking damages forthe delay. They now appeal from an ordergranting summaryjudgmentto the county. We affirm. 

### The purpose ofsummaryjudgmentis to avoid a useless trial. Seven Gables Corp. v. MGM/UA Entm't Co.. 106 Wn.2d 1, 12, 721 P.2d 1 (1986). 

### Summaryjudgment is properly granted when the pleadings, affidavits, depositions, and admissions on filedemonstrate there is no genuine issue of material fact and the moving party is entitled tojudgment as a matterof law. Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998). Any doubt as 

### to the existence of a genuine issue of material fact is resolved againstthe movingNo. 73208-1-1/2 

### party. Atherton Condo. Apartment-Owners Ass'n Bd. ofDirs. v. Blume Dev. Co., 115 Wn.2d 506, 516, 799 P.2d 250 (1990). But the existence of a material fact 

### cannot be hypothetical. "The adverse party must setforth specificfacts showing there is a genuine issue for trial or have the summaryjudgment, ifappropriate, entered against them." Seven Gables. 106 Wn.2d at 12-13. We review the facts inthe light mostfavorable to the Emersons. Inlate 

### August 2010, Kenneth Emerson started constructing a sunroom addition to the Emersons' Camano Island home. He did not obtain a permitfor this work. 

### Someone who observed the construction anonymously notified KellyEmerson's 

### opponent in the then upcoming election for Island County Commissioner. A complaint, alleging damage to wetlands, reached the Island County Department 

### of Planning and Community Development. The county dispatched an inspector to the Emerson property. Noonewas home. The inspectorobserved the framed addition at the backofthe home and stapled a stop workorderto the framing. 

### On August 31, 2010, Kenneth Emerson went to the countypermitting office. He filled out and filed forms to obtain an after-the-fact building permitfor the addition. On one ofthe forms, he stated that no wetlands existed on the 

### Emerson property. On September 16 and September23, 2010, the county sent 

### letters stating that the county had information indicating the presence of a wetland on the Emersons' property. The Emersons received a notice ofviolation letter on October 1, 2016. 

### The letter offered the opportunity to come intocompliance within 30 days byNo. 73208-1-1/3 

### submitting a wetland report. The letter indicated thatfailure to come into compliance would result inan enforcement order and civil fines. The Emersons did not submit a wetland report. Feeling certain there were


### no wetlands on the property, they filed a lawsuit against individuals they believed



### were engaging in a misuse of power to discredit Kelly Emerson's political campaign. Later, they added the county as a defendant. In November 2010, the county sent an enforcement orderto the Emersons. The order advised the Emersons thatthey needed to submit a 

### wetland report within 30 days. It stated that civil fines would be imposed ifthey failed to comply. 

### InJanuary 2011, the county issued a supplemental enforcement order. 

### The supplemental order repeated the demand for a wetland report and assessed

a civil penalty of$37,000 againstthe Emersons. 

### In May2011, the trial courtentered summaryjudgment and dismissed the Emersons' lawsuit. The summaryjudgmentwas not appealed. InJune 2011, the Emersons retained SNR Co. to determine whether 

### wetlands were on their property. SNR concluded no wetlands were present. 

### In July2011, the Emersons submitted the SNR report to the county. The countyexpressed concern with the methodologies used by SNR and forwarded the report to the Departmentof Ecology for a second opinion. In December 2011, the Emersons were told the SNR report did not comply with federal and state standards. The Emersons retained a second expert, Ed 

### Kilduff, to perform a peerreview of the SNR report. Kilduffcriticized theNo. 73208-1-1/4 

### DepartmentofEcologyfor comments that "appearto deliberately misunderstand

some ofSNR's points for the purpose ofmanufacturing controversy." The Emersons presented Kilduffs peer review to the county. Again, the county sought assistance from the Department of Ecology. In early 2012, the Department ofEcology concluded that Kilduffs peer review was unpersuasive because itlacked site specific information. The Departmentof Ecology recommended that state orcounty staffperform an onsite inspection at no costto 

### the Emersons. The inspection would facilitate a final determination regarding the 

### presence or absence ofregulated wetlands on the Emersons' property. The Emersons rejected the suggestion. The Emersons did not believe the state or 

### the county could make an unbiased determination as to the existence of wetlands on their property. 

### In early 2013, the Emersons were repeatedly advised thatthe dispute could be resolved quickly and without cost ifthe county or the state was allowed 

### to inspectthe Emerson property. Morethan 10 letters and phone calls conveyed this recommendation to the Emersons. The Emersons refused to allow inspection. On March 28, 2013, the county issued a second supplemental 

### enforcement order. The second supplemental order asserted the violations listed inthe initial enforcement order, noted the previous imposition of a $37,000 civil 

### fine, and stated that a lien would be placed on the Emersons' property ifthe Emersons did not submit a properwetland report. On March 29, 2013, theNo. 73208-1-1/5 

### county denied the Emersons' 2010 permit application. The Emersons appealed the denial and the second supplemental enforcement order. InJune 2013, the parties executed a settlement agreement. Underthe 

### terms ofthe agreement, the Emersons agreed to pay a reduced fine of$5,000, submit a wetland report that strictly complied with the Departmentof Ecology wetland manual, and withdraw their administrative appeal. The fine was to be paid within 30 days ofthe execution ofthe settlement agreement, and the wetland report was to be submitted within 60 days after execution. Upon withdrawal ofthe appeal, the county would return a substantial portion ofthe administrative appeal fees. Upon submission ofthe new wetland report, the county would process the permit application ingood faith. The agreement allowed the county to obtain third party review ofthe new wetland report but only 

### ifthe county reasonably determined thatthe report did not strictly comply withthe Department of Ecology's wetland manual. The Emersons paid the fine and withdrew their administrative appeal as 

### required by the agreement. After retaining a third expert, the Emersons submitted a wetland report to the county on August 27, 2013. 

### On September 16, 2013, the Emersons e-mailed the county, stating that the county would be indefault if a permitwas not issued in 10 days. On September23, 2013, the county asked the Emersons to clarifycertain aspects of their wetland report. On October 16, 2013, the Emersons submitted supplemental responses 

### from theirexpertwithout waiving their previous claim ofdefault. That same day,No. 73208-1-1/6 

### the county renewed its requestto inspectthe Emerson property. On October 18, 2013, the Emersons rejected the request and declared a breach ofthe settlement agreement. The Emersons initiated this lawsuit in November 2013. Their complaint 

### demanded damages and injunctive reliefunder a variety of legal theories, 

### including breach ofthe settlement agreement. The countyforwarded the Emersons' wetland report and supplemental responses to the Departmentof 

### Ecology approximately one week after the Emersons filed the complaint. The 

### Departmentof Ecology determined that the Emersons' report did not complywith the wetland manual. 

### InOctober2014, the county inspected the Emerson property under CR 

### 34(a)(2), the discovery rule that authorizes a litigantto request permission for 

### entry onto designated landpossessed by the respondingparty. Nowetlands

were found. The county issued the building permit. 

### The parties agreed to arbitration of the breach of contract claim. The trial court dismissed allthe other claims on summaryjudgment. The Emersons moved for reconsideration. Their motion was denied. The Emersons ask this court to reinstate their claims under RCW 

### 64.40.020, under the takings clause of the Washington Constitution, under 42 

### U.S.C. § 1983 for substantive due process violations, and for common lawfraud. RCW 64.40.020 

### RCW 64.40.020 grants permit applicants a limited cause of action for 

### damages ifan agency's permitting actions are arbitrary, capricious, unlawful, orNo. 73208-1-1/7 

### otherwise exceed its lawful authority, or ifan agency fails to act within time limits established by law. See Birnbaum v. Pierce Countv. 167 Wn. App. 728, 734, 274 P.3d 1070(2012). 

### Applicantfor permit—Actionsfor damagesfrom governmental actions. (1) Owners of a property interest who have filed an application for a permit have an action for damages to obtain relief 

### from acts ofan agency which are arbitrary, capricious, unlawful, or exceed lawful authority, or relieffrom a failure to actwithin time limits established by law: PROVIDED, Thatthe action is unlawful or in excess of lawful authority only ifthe final decision ofthe agency was made with knowledge of its unlawfulness or that itwas in excess of lawful authority, or itshould reasonably have been known to have been unlawful or in excess of lawful authority. (2) The prevailing party in an action brought pursuant to this chapter may be entitled to reasonable costs and attorney's fees. (3) No cause of action is created for relief from unintentional procedural or ministerial errors of an agency. 

### (4) Invalidation ofany regulation ineffect prior to the date an application for a permit is filed with the agency shall not constitute a cause of action underthis chapter. RCW 64.40.020. Any action brought under chapter 64.40 RCW "shall be commenced only within thirty days after all administrative remedies have been exhausted." RCW 64.40.030. The county's motion for summaryjudgment argued that the Emersons failed to exhausttheir administrative remedies. The county also sought dismissal underthe 30-day limitations period. The Emersons responded that they had no obligation to exhausttheir administrative remedies because the county had not issued a final orderwhen they broughtthis lawsuit, there were no administrative remedies available to them underthe settlement agreement, and the county lacked the institutionalNo. 73208-1-1/8 competence to resolve the dispute. The Emersons cited Saben v. Skagit Countv. 

### 136 Wn. App. 869, 152 P.3d 1034 (2006). The trial court dismissed the Emersons' RCW 64.40 claim for failure to exhaust administrative remedies. 

### The Emersons argue, citing Saben, thatthere is no exhaustion requirement under RCW 64.40 when a claim stems from a settlement agreement. That is not the holding of Saben. In Saben, Skagit County denied the Sabens a permit. The Sabens filed

an administrative appeal. Saben, 136 Wn. App. at 872. Itwas agreed that Skagit County would issue the permit ifthe Sabens complied with certain laws and withdrew their appeal. The Sabens complied, but Skagit County refused to issue the permit. The Sabens filed another administrative appeal and brought an action for damages under RCW 64.40. Saben, 136 Wn. App. at 873-74. The superior court granted summaryjudgmentfor the Sabens, ruling thatthe county



### was bound by its settlement agreementto issue the permit and finding the county liable for damages. This court affirmed. "The county adopted an interpretation and made an agreement based on it. Then, unilaterally, itdisregarded that interpretation, disregarded its agreement, and disregarded the consequences to the Sabens, who acted in reliance upon it." Saben, 136Wn. App. at 878. Nothing in Saben excuses a plaintifffrom the statutory requirementto exhaust administrative remedies before bringing suit. The exhaustion requirement established by RCW 64.40.030 was not at issue.No. 73208-1-1/9 

### The Emersons alternatively contend that their claim is supported by Smoke v. City ofSeattle. 132 Wn.2d 214, 937 P.2d 186 (1997). InSmoke, the 

### city ofSeattle sent a letter (the Mills letter) denying land use and building permits to a setof plaintiffs. The letter informed the plaintiffs of their option to apply for a legal building site letteror a formal building cite code interpretation by the director. Neither a building site letter nor an interpretation by the directorwas a required component ofthe city's application process. Smoke, 132 Wn.2d at 218. The plaintiffs brought an action againstthe city under RCW 64.40 without seeking a building site letter or a director's interpretation. Smoke, 132Wn.2d at 220. The case reached our Supreme Court, where the issue was whetherthe plaintiffs could claim damages under RCW 64.40. The courtfirst held that the statute unambiguously requires exhaustion ofadministrative remedies. Smoke, 132 Wn.2d at 221-22. The next question was whetherthe plaintiffs had an unexhausted remedy. "No exhaustion requirement arises

. . . without the issuance of a final, appealable order. Thus, we mustfirst determine whetherthe Millsletterconstituted a final decision by the City." Smoke, 132 Wn.2d at 222 (citation omitted). The court concluded thatthe plaintiffs did not have to pursue a site letter or a director's interpretation because neither option could have reversed the decision to deny the permits. Because there was no further administrative remedy afterthe Mills letter, the Millsletterwas a final and 

### appealable decision denying the permits. Smoke, 132Wn.2d at 226-27.No. 73208-1-1/10 

### The Emersons contend that byentering into the settlement agreement, they became likethe plaintiffs inSmoke inthatthey had no further administrative remedies. This case is factually unlike Smoke because the Emersons did not 

### obtain a final, appealable order. They withdrew their appeal. 

### The county contends that ifthe Emersons wanted to pursue a remedy under RCW 64.40 in addition to pursuing a breach ofcontract action, the 

### Emersons could have either reactivated their appeal ofthe building permitdenial

or sought a new appeal ofthe wetlands inspection condition that the county was imposing. The Emersons respond that there was no way for them to reactivate their appeal or seek a new appeal because the terms ofthe settlement 

### agreement did not permitthem to pursue an administrative remedy. They rely on the venue provision stating that Island County Superior Courtwould be the venue for any "action" arising out ofthe agreement: Governing Law and Venue. This agreement shall be governed by and interpreted in accordance with the laws ofthe State of 

### Washington. The venue for any action arising out of this Agreement shall be inthe Superior Court ofthe State ofWashington, inand for Island County. The Emersons contend that the venue provision amounted to an agreementto exchange administrative remedies for ajudicial action. 

### Settlement agreements are governed by general principles ofcontract law. Saben, 136 Wn. App. at 876. The touchstone ofcontract interpretation is the 

### parties' intent. Tanner Elec. Coop, v. Puoet Sound Power & Light Co., 128 Wn.2d 656, 674, 911 P.2d 1301 (1996). A settlement agreement listing the superior court as the venue for an "action" does not evidence an intentto waive

10No. 73208-1-1/11 

### the exhaustion requirement in RCW64.40.030. The venue provisiondoes not referto the administrative process or exhaustion ofadministrative remedies. The Emersons did not obtain a final, appealable, administrative order 

### denying their permiteitherbefore or after bringing this lawsuit. By bringing suit 

### before obtaining a final, appealable order, the Emersons deprived the county of the opportunity to correct its own mistakes, which is "one ofthe primary purposes ofthe doctrine to exhaust administrative remedies." Smoke. 132 Wn.2d at 226. 

### We conclude the Emersons' RCW 64.40 claim was properly dismissed for failure

to exhaust administrative remedies.TAKINGS The Emersons contend that they have a triable takings claim against the county underthe Washington Constitution. Count 3: Takings under State Constitution 38. Plaintiffs reallege paragraphs 1-26 as iffully setforth herein.39. The Washington State Constitution provides, "No private property shall be taken or damaged for public or private use without just compensation having been first made, or paid into courtfor the owner." Const. Art. I, § 16. 40. By virtue ofthe actions complained above the Department has taken or damaged the Emersons' Property without just compensation. 41. As a result ofthis taking, the Emersons have suffered significant damage in an amount to be proven at trial. The county's motion for summaryjudgment argued that a permitting delay cannot amount to a constitutional taking. The county also argued that no taking occurred because the Emerson property did not suffertotal economic deprivation.

11No. 73208-1-1/12 

### Inresponse, the Emersons argued only thatthe Washington Constitution provides "more protection" than its federal counterpart. The entirety ofthe Emerson's response regarding theirtakings claim states: The Emersons' third count, "Takings underthe state Constitution," seeks damages for Defendant's violation of Article I, § 16 ofthe Washington State Constitution. Defendant has moved for summary judgment of a claim for takings underthe Federal constitution—a claim that is not before the court. Defendant provides no authority or discussion regarding the Emersons' claim underthe State constitution, which, under well settled case law, affords citizens with more protection than that guaranteed by the Federal Constitution. See, e.g., Manufactured] HousH Cmtvs. ofWash, v. State, 142 Wn.2d 347, 360-61, 13 P.3d 183 (2000). Accordingly, Defendant has failed to meet its burden and the motion must be denied. The Emersons offered no otherbasis for denying the county's motion with 

### regard to theirtakings claim. The county pointed out in its reply thatthe federal constitution provides at least as much protection inthe context of a regulatory taking.The Emersons argue on appeal that the trial court impermissibly 

### dismissed theirtakings claim under a theory not originally briefed inthe county's opening memorandum. They cite White v. Kent Medical Center, Inc., 61 Wn. App. 163, 810P.2d4(1991). This case is not controlled by White. The county's reply did not present



### new theories for summaryjudgment. The problem for the Emersons is thatthey did not substantively respond to the county's motion to dismiss the takings claim. Because the Emersons failed to provide any substantive argumentto 

### demonstrate a genuine issue ofmaterial fact under CR 56, the trialcourt properly dismissed the takings claim.

12No. 73208-1-1/13

SUBSTANTIVE DUE PROCESS The Emersons further contend that they have a triable substantive due 

### process claim under42 U.S.C § 1983, based on the county's delay inprocessing their application pursuantto the settlement agreement. "Arbitrary or irrational refusal or interference with processing a land use permit violates substantive due process." Mission Springs, Inc. v. City of Spokane, 134 Wn.2d 947, 970, 954 P.2d 250 (1998). When executive action like

a permitting decision is at issue, only egregious official conduct can be said to be arbitrary inthe constitutional sense. Official conduct is arbitrary inthe constitutional sense if itamounts to an abuse of power lacking any reasonable 

### justification inthe service of a legitimate governmental objective. Shanks v. Dressel. 540 F.3d 1082, 1088 (9th Cir. 2008). If it is at leastfairly debatable that 

### the county's conduct is rationally related to a legitimate governmental interest, there has been no violation of substantive due process. Halverson v. Skagit Countv, 42 F.3d 1257, 1262 (9th Cir. 1994). When all inferences are drawn in the Emersons' favor, the county's 

### actions inreprocessing the Emersons' application do not amountto a substantive 

### due process violation. The county's actions were directly related to determining whetherwetlands were on the Emerson property. We affirmthe dismissal of the Emersons' substantive due process claims.

13No. 73208-1-1/14

FRAUD 

### The Emersons' complaint alleges thatthe county fraudulently induced them to enter into a settlement agreementthe county did not intend to honor. 

### They contend the court erred indismissing this claim. To state a claim for fraud, a plaintiffmust satisfy the following nine
elements: 

### (1) representation of an existing fact, (2) materiality, (3) falsity, 

### (4) the speaker's knowledge of its falsity, (5) intent of the speaker that itshould be acted upon bythe plaintiff, (6) plaintiff's ignorance 

### of itsfalsity, (7) plaintiffs reliance on the truth of the representation, (8)plaintiff's right to rely upon the representation, and (9)damages suffered by the plaintiff. W. Coast, Inc. v. Snohomish Countv, 112 Wn. App. 200, 206, 48 P.3d 997 (2002).

### In the settlement agreement, the county promised to issue a permit to the 

### Emersons only ifthey submitted a wetland report thatstrictlyfollowed certain 

### methodologies. The parties agreed to adisclaimerclause stating thatnothing in the agreement should be construed as a guarantee ofapproval or as constituting

a "representation" by the county: 

### Disclaimerby Department. Nothing in thisAgreement shall be construed as a waiver bythe County of any permit requirements 

### applicable to the Emersons constructionactivities on the Property pursuant to the County Code or other applicable laws, rules, or 

### regulations. Nothing inthis Agreement shall be construed as 

### guaranteeing theavailability of anypermits orapprovals regarding said activities. Nothing in this Agreement shall be construed as 

### constituting a representation of any kind or nature by the County, or any official oremployee thereof. The Emersons contend thatthe county should not be allowed to contract 

### around itsduty to betruthful in negotiations becausethis"would sanction

14No. 73208-1-1/15 

### fraudulent and generally deceptive behavior." The Emersons cite no authority for this argument. They do not explain how a court can enforce a written agreement

as if itguaranteed a permitwhen the agreement expressly states it is not a 

### guarantee. Also, the Emersons overlookthe principle that promises offuture performance are not representations ofexisting fact. SeeW. Coast, 112Wn. App. at 206. The Emersons have not created an issue ofmaterial fact to establish that the county made a materially false representation. They fail to show why the disclaimer does not control. The trial court properly granted summaryjudgment

on the Emersons' claim offraudulent inducement. Affirmed. 

# vkcx&e v

~r~ WE CONCUR: 

# h**J(i y.

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